Investing is simply putting your money to work in order to make more money. However, before investing anywhere in fixed deposits, you should be knowledgeable about them. Many people can mislead you and steal your money under the guise of investing.
So, before you invest in a fixed deposit, there are a few things you should consider.
Split your amount
You could simply invest a large sum of money in fixed deposits and leave it for a few years, but the interest rate on the fixed deposit may rise higher than the rate at which you deposited your money.
You should divide your money accordingly over a period of years, observe the fluctuations, and then invest accordingly.
Safety
Because there are so many intermediaries in the market, putting money in fixed deposits can be extremely risky.
To avoid losses, simply divide your funds and deposit your money in different banks. This type of investment can also avoid pre-mature withdrawal penalties.
Tax liability
If you invest less than ten thousand rupees in fixed deposits, you are not required to pay tax; however, if you invest more than ten thousand in a bank, you are required to pay tax.
Pay tax in accordance with the tax slab you fall under before the due date. If you are unable to pay it by the due date, you must pay the best penalty on the tax.
You should check your tax liability at the start of the year, and if it exceeds 10%, you should pay it before the due date. You can also pay your taxes quarterly.
Clubbing of fixed deposit
Many people nowadays invest in the names of their family and children in order to avoid paying taxes.
If the money is simply given to family members of children, no tax is due; however, if the money is invested, the investor’s income is taxed.
